Missouri lawmakers propose efforts to help businesses

Thursday, December 2, 2010 | 7:27 p.m. CST

BY
CHRIS BLANK/The Associated Press

JEFFERSON CITY — Missouri lawmakers are promising a focus on job creation and business incentives in next year's session, including proposals to cut taxes, limit business regulations and prohibit requirements forcing prospective workers to join labor unions.

Sen. Luann Ridgeway is sponsoring measures to make Missouri a "right-to-work" state and replace corporate and individual income taxes with a sales tax. She said Thursday that unemployment remains high, companies are not choosing to come to Missouri and that lawmakers need to try a new approach to economic development. She said neighboring "right-to-work" states have lower jobless rates than Missouri's.

"We're right-to-work, and we're not going to tax you to death. That appears to be two of the major issues that drives businesses to a certain state and away from another state," said Ridgeway, R-Smithville.

The "right-to-work" legislation would make it a crime to force workers to join unions or to pay fees to labor groups or other organizations to be hired. Existing union contracts would be exempted until the agreement needs to be renewed. The tax proposal, which would require voter approval, would cap the sales tax at 7 percent.

Union officials contend that "right-to-work" efforts make little sense because they do not attract new businesses and reduce employees' standards of living.

Herb Johnson, the secretary-treasurer of the Missouri AFL-CIO, said states have attracted new companies by offering tax incentives, not by becoming "right-to-work" states.

"The open shop proposal isn't going to change a thing. ...It won't help Missouri, but it will drive down the standard of living," Johnson said.

Lawmakers were able to start filing bills this week for the annual session that starts in January.

After claiming historic majorities in the state House and Senate, Republican legislative leaders have listed boosting Missouri's employment as a priority. Business groups suggest lawmakers consider legislation to increase the reward firms get for submitting sales taxes on time and to give a 50 percent tax deduction for business income that could be applied to corporate and individual income taxes.

Incoming House Speaker Steven Tilley told reporters Thursday that he planned to pursue any proposal for creating jobs.

"Clearly, the most pressing issue is putting people back to work. ...It's the focus of the citizens of this state, and we're going to work very, very hard at that," said Tilley, R-Perryville.

Other legislators filed bills to reduce corporate taxes, offer a tax deduction for small businesses that create jobs and restrict many new state regulations that affect small businesses.

Sen. Eric Schmitt proposed capping and eventually eliminating the state's franchise tax, which is levied on corporations' assets, inventory and property. In 2009, the Legislature eliminated the franchise tax for about three-quarters of the roughly 20,000 businesses that had been charged it.

He contends the franchise tax is a "double-tax" that inhibits economic development and job expansion.

"It is a disincentive to have a lot of assets located in Missouri, and if your company continues to grow, the bigger you get, the more you're going to be taxed," said Schmitt, R-Glendale. "It is a disincentive for companies to be here."

Another measure filed Thursday would bar many new state regulations for 5 years that affect businesses with fewer than 50 employees. The legislation also offers small businesses a $10,000 tax deduction for each full-time job they create with a salary that matches the county's average wage. The deduction doubles if the business also pays half of its workers' health insurance premiums.

Sponsoring Rep. Denny Hoskins, R-Warrensburg, said small businesses are the backbone of the state's economy and that they need some assistance.